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What you should know before hiring an independent contractor

While every business owns and uses various forms of intellectual property, many business owners are not aware that those assets can easily be relinquished or damaged if not properly managed. It is important to recognize the significance of protecting intellectual property especially if your company uses independent contractors.

If you use independent contractors to create copyrightable works, you should be very careful about ownership issues. Unless there is an appropriate agreement in place, the independent contractor will generally own the copyright, despite the fact that he or she was paid to create the work.

There is an exception for a category called "works made for hire." However, certain criteria outlined by copyright law must be met.

First, there needs to be a written agreement between the parties, prior to the creation of the work, specifying that the work is to be a "work made for hire"; and the work has been specifically ordered or commissioned for one of the following nine categories of works:

• A contribution to a collective work
• Part of a motion picture or other audiovisual work
• A translation
• A supplementary (work prepared for publication as a secondary adjunct to another author's work such as an index or forward).
• A compilation
• An instructional test
• A test
• Answer material for a test
• An atlas

In addition, although it is not stated in the Copyright Act, the "work made for hire" document must be signed by both parties prior to the commencement of the work. If the business owner fails to satisfy any of these requirements the work will not qualify as a "work made for hire" and the business could lose copyright ownership of the work.

You may want to contact the U.S. Copyright Office (202-707-3000) for more information on how to ensure your business is protected.